Education Loans

Information


In India, various types of education loans are offered by banks and financial institutions to meet the diverse needs of students pursuing education in India and abroad. These loans cater to different levels of education, fields of study, and individual requirements. Here are the major types:

1. Domestic Education Loans

  • Purpose: For students pursuing higher education within India.
  • Covers: Tuition fees, examination fees, books, equipment, travel, and living expenses.
  • Eligibility: Admission to recognized institutions in India.

2. Overseas Education Loans

  • Purpose: For students pursuing education abroad.
  • Covers: Tuition fees, travel expenses, accommodation, and living expenses.
  • Popular for: Courses like MS, MBA, MBBS, and other professional degrees in countries like the USA, UK, Canada, Australia, etc.

3. Undergraduate Education Loans

  • Purpose: For undergraduate courses, including professional and technical degrees.
  • Eligibility: Students with confirmed admission to recognized institutions.

4. Postgraduate Education Loans

  • Purpose: For postgraduate degrees, including specialized professional courses.
  • Eligibility: Admission to recognized universities or institutions in India or abroad.

5. Professional Education Loans

  • Purpose: For professional courses such as medical, engineering, management, law, architecture, etc.
  • Eligibility: Students with admission to reputed institutions offering professional courses.

6. Skill Development Loans

  • Purpose: For short-term courses or skill enhancement programs (e.g., IT certifications, vocational training).
  • Eligibility: Courses recognized by government or reputed institutions.

7. Top-Up Education Loans

  • Purpose: For students who need additional funding for their ongoing education.
  • Eligibility: Existing education loan with satisfactory repayment record.

8. Parental Education Loans

  • Purpose: Taken by parents to finance their child’s education.
  • Covers: Tuition fees and other related costs.

9. Student Loans for Boarding and Schooling

  • Purpose: For students pursuing schooling or pre-university education.
  • Covers: Fees, accommodation, and other costs.

10. Loans for Competitive Exam Coaching

  • Purpose: For students preparing for exams like JEE, NEET, UPSC, CAT, etc.
  • Eligibility: Admission to recognized coaching centers.

11. Education Loans under Government Schemes

  • Vidya Lakshmi Portal: A government initiative that provides a single platform to apply for multiple education loans and scholarships.
  • CSIS (Central Sector Interest Subsidy Scheme): Offers interest subsidy for students from economically weaker sections (EWS) during the moratorium period.
  • Padho Pardesh Scheme: Interest subsidy for minority students pursuing studies abroad.
  • Dr. Ambedkar Central Sector Scheme: For EWS and OBC students.

Key Features of Education Loans in India:

  • Moratorium Period: Repayment starts after course completion or after a grace period post-education.
  • Interest Rates: Generally 7-15%, depending on the bank, loan type, and borrower profile.
  • Collateral Requirement: Loans above ₹7.5 lakhs often require collateral; loans below this amount may not.
  • Tax Benefits: Interest paid is eligible for deduction under Section 80E of the Income Tax Act

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